Mobile Firm Amobee Raises $22 Million For Ad-Supported Cellphone Service

As people spend less money per month on mobile phone calls, wireless carriers are trying to figure out how to juice growth with ad revenue. Enter Amobee, whose platform lets mobile operators add advertising to a variety of cellphone functions, including apps, messaging (SMS, MMS), video and music streaming, games, Web browsers, etc.

The Redwood City, Calif.-based startup just closed a $22 million round of funding from Motorola (MOT), Cisco (CSCS), and earlier investors including Telefonica, Vodafone (VOD), Accel Partners, Globespan, and Sequoia Capital, MocoNews reports. The company has now raised a total $52 million.

Amobee's primary pitch is a system that rewards users who watch ads: Watch a clip, get free mobile Web access -- that sort of thing. We're not sold on the idea, but it seems to have picked up some traction. While Amobee doesn't have any U.S. customers yet, but it's working with Telefonica, and has its platform in place with Vodafone in Italy, Spain, and the Czech Republic.

And in the U.S., Virgin Mobile (VM) has a somewhat similar service, which allows its subscribers to watch ads to get free airtime. In May, the "virtual" carrier said that 700,000 of its 5 million subscribers -- about 15% -- have opted-in to the service, earning more than 26 million minutes of free airtime.